What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2026-05-15 compared with 2025-11-14 · 151 added, 298 removed, 63 unchanged (88% of the section changed)

10 unchanged sentences

in the forward-looking statements.

Company, incorporated in the state of New York in May 1984 has conducted business in the name of DSS, Inc.

On September 16, 2021, the

board of directors approved an agreement and plan of merger with a wholly owned subsidiary, DSS, Inc.

(a New York corporation, incorporated

in August 2020), for the sole purpose of effecting a name change from Document Security Systems, Inc.

This change became

effective on September 30, 2021.

maintained the same trading symbol “DSS”.

(together with its consolidated subsidiaries, referred to herein as “DSS,” “we,” “us,” “our”

or the “Company”) currently operates nine (9) distinct business lines with operations and locations around the globe.

business lines are:

(1) Product Packaging, (2) Biotechnology, (3) Commercial Lending, (4) Securities and Investment Management, (5) Direct

divisions, their business lines, subsidiaries, and operating territories:

(1) Our Product Packaging line is led by Premier Packaging

Corporation, Inc.

(“Premier”), a New York corporation.

Premier operates in the paper board and fiber based folding carton,

consumer product packaging, and document security printing markets.

It markets, manufactures, and sells sophisticated custom folding

cartons, mailers, photo sleeves and complex 3-dimensional direct mail solutions.

Premier is currently located in its new facility in

Rochester, NY, and primarily serves the US market.

(2) The Biotechnology business line was created to invest in or acquire companies

in the BioHealth and BioMedical fields, including businesses focused on the advancement of drug discovery and prevention, inhibition,

and treatment of neurological, oncological, and immune related diseases.

This division is also targeting unmet, urgent medical needs,

and is developing open-air defense initiatives, which curb transmission of air-borne infectious diseases, such as tuberculosis and influenza.

(3) Our Commercial Lending business division, driven by American Pacific Financial (“APF”), is organized for the purposes

of being a financial network holding company, focused on acquiring equity positions in (i) undervalued commercial bank(s), bank holding

companies and nonbanking licensed financial companies operating in the United States, South East Asia, Taiwan, Japan and South Korea,

and (ii) companies engaged in—nonbanking activities closely related to banking, including loan syndication services, mortgage banking,

trust and escrow services, banking technology, loan servicing, equipment leasing, problem asset management, SPAC (special purpose acquisition

company) consulting services, and advisory capital raising services.

(4) Securities and Investment Management was established to develop

and/or acquire assets in the securities trading or management arena, and to pursue, among other product and service lines, broker dealers,

and mutual funds management.

Also in this segment is the Company’s real estate investment trusts (“REIT”), organized

for the purposes of acquiring hospitals and other acute or post-acute care centers from leading clinical operators with dominant market

share in secondary and tertiary markets, and leasing each property to a single operator under a triple-net lease.

the REIT was formed

to originate, acquire, and lease a credit-centric portfolio of licensed medical real estate.

(5) Direct Marketing, led by the holding

corporation, Decentralized Sharing Systems, Inc.

(“Decentralized”) provides services to assist companies in the emerging

growth “Gig” business model of peer-to-peer decentralized sharing marketplaces.

Direct Marketing’s products include,

among other things, nutritional and personal care products sold throughout North America, Asia Pacific, Middle East, and Eastern Europe.

five reporting segments are as follows:

(“Premier”) Premier Packaging Corporation provides custom packaging services and serves clients in the

pharmaceutical, nutraceutical, consumer goods, beverage, specialty foods, confections, photo packaging and direct marketing industries,

among others.

The group also provides active and intelligent packaging and document security printing services for end-user customers.

In addition, the division produces a wide array of printed materials, such as folding cartons and paperboard packaging, security paper,

vital records, prescription paper, birth certificates, receipts, identification materials, entertainment tickets, secure coupons and

parts tracking forms.

The division also provides resources and production equipment for our ongoing research and development of security

printing, brand protection, consumer engagement and related technologies.

(“Commercial Lending”) through its operating company, American Pacific Financial, Inc.

represents our banking and financing business line.

is organized for the purposes of being a financial network holding company, focused

providing commercial loans and on acquiring equity positions in (i) undervalued commercial bank(s), bank holding companies and nonbanking

licensed financial companies operating in the United States, South East Asia, Taiwan, Japan and South Korea, and (ii) companies engaged

in—nonbanking activities closely related to banking, including loan syndication services, mortgage banking, trust and escrow services,

banking technology, loan servicing, equipment leasing, problem asset management, SPAC (special purpose acquisition company) consulting,

and advisory capital raising services.

From this financial platform, the Company shall provide an integrated suite of financial services

for businesses that shall include commercial business lines of credit, land development financing, inventory financing, third party loan

servicing, and services that address the financial needs of the world Gig Economy.

Company, which was incorporated in the state of New York in May 1984, previously conducted its business under the name of Document Security

Systems, Inc On September 16, 2021, our board of directors approved an agreement and plan of merger with a wholly owned subsidiary, DSS,

This subsidiary, incorporated in August 2020, was created for the sole purpose of facilitating a transformational name change from

Document Security Systems, Inc.

This significant shift in our identity became official on September 30, 2021.

With the name

change, DSS, Inc.

retained its trading symbol, “DSS,” and is currently trading under its CUSIP number to 26253C 201.

change reflects not only our evolution as a company but also our commitment to adapting and growing in an ever-changing business landscape.

(referred to herein as “DSS,” “we,” “us,” or “our”) now operates across four

distinct business lines, each with its own unique scope and presence on a global scale.

These business lines encompass a wide range of

industries and sectors, including:

Our involvement in product packaging represents our dedication to delivering innovative and sustainable packaging solutions

that meet the evolving needs of various markets.

Biotechnology:

(“Biotech”) targets unmet, urgent medical needs and expands the borders of medical and pharmaceutical science.

drives mission-oriented research, development, and commercialization of solutions for medical advances in human wellness and healthcare.

By leveraging technology and new science with strategic partnerships, Biotech provides advances in drug discovery for the prevention,

inhibition, and treatment of neurological, oncology and immuno-related diseases.

Other exciting technologies include a breakthrough alternative

sugar aimed to combat diabetes and functional fragrance formulations aimed at the industrial and medical industry.

has several important and valuable products, technology or compounds that are in continuing development and/or licensing stages:

Multi-faceted

therapeutic platform for metabolic, neurologic, cancer, and infectious diseases.

A polyphenol compound

that is believed to be successful in antiviral infection treatments.

Equivir/Nemovir technology is a novel blend of FDA Generally

Recognized as Safe (“GRAS”) eligible polyphenols ( e.g., Myricetin, Hesperetin, Piperine) which have demonstrated

antiviral effects with additional potential application as health supplements or medication.

Polyphenols are sourced from fruits,

vegetables, and other natural substances.

Myricetin is a member of the flavonoid class of polyphenolic compounds with antioxidant

Hesperitin is a flavanone and Piperine is an alkaloid, commonly found in black pepper.

as food additive, and natural preservative for beauty and person care products as well as natural food preservative.

Food preservative

booster made up of polyphenols that extend the shelf life.

Advanced bio-compatible

plastics that mitigate accumulation of plastics in oceans and landfills and provide UVA and UVB protection for many types of material

for including containers, hard surfaces, and fibers for clothing.

The technology is presently in development and testing antimicrobial

plastics for consumer products that control the spread of active pathogens such as SARS-CoV-2, Influenza, E.

coli, Staph, and Rhinovirus,

by exploiting key strategies found in the biological realm.

These new plastics are specifically focused on solutions for common products

such as cups, plates, utensils, plastic bags, and countertops.

The first prototypes are currently undergoing antimicrobial resistance

Laetose technology

is derived from a unique combination of sugar and inositol, which demonstrates the ability to inhibit the inflammatory and metabolic

response of sugar alone.

A sugar alternative which is believed to lower human glycemic indexes and is believed to be a breakthrough

alternative sugar aimed to combat diabetes.

The use of Laetose in a daily diet, compared to sugar, could result in 30% lower sugar

consumption and lower glycemic index/load.

A botanical compound

believed to serve as an insect repellent and anti-microbial agent.

3F is a unique formulation of specialized ingredients ( e.g.

terpenes) from botanical sources with demonstrated effect as an insect repellent and an antimicrobial.

3F Mosquito Repellent:

3F repellent contains botanical ingredients that mosquitos avoid.

These ingredients are scientifically proven1 to affect the mosquito’s

receptors, essentially making the insect blind to a human’s presence.

This can be utilized as a stand-alone repellent or as

an additive in detergents, lotions, shampoo, and other substances to provide mosquito protection.

3F Antimicrobial:

3F antimicrobial

contains botanical ingredients known to kill viruses.

These ingredients are scientifically proven to inhibit viral replication.

can be utilized as a stand-alone antimicrobial or as an additive in detergents, lotions, shampoo, fabrics, and other substances.

The solution to

the Patent Cliff accomplished by creating a new class of medicinal chemistry that uses advanced methods to increase effectiveness

and persistence of natural compounds and existing drugs.

The safety attributes of the original molecules are maintained.

drug discovery processes modify functional groups.

Quantum’s new techniques alter behavior of molecules at the sub-molecular

It is estimated that 65% of the World Health Organization Essential Medicines List can be improved and re-patented using Quantum

and these methods can be used to enhance and patent natural compounds including many substances used in traditional medicines around

Bio Med (license):

gut health product that helps to regulate many physiological functions, ranging from energy regulation and cognitive processes to

toxin neutralization and immunity against pathogens.

In the field of biotechnology, we are focused on pioneering scientific advancements and technologies that have the potential to transform

human healthcare and wellness.

We are actively engaged in commercial lending, offering a suite of financial services that cater to the unique needs of businesses,

ranging from commercial lines of credit to land development financing.

and Investment Management:

(“Securities”) Securities was established to develop and/or acquire assets in the securities

trading or management arena, and to pursue, among other product and service lines, real estate investment funds, broker dealers, and

mutual funds management.

This business sector has already established the following business lines/investments and associated products

and services:

REIT Management Fund:

In March 2020, DSS Securities formed AMRE (“American Medical REIT”) and its management company AAMI (“AMRE Asset

Management, Inc.) Through AAMI/AMRE, a medical real estate investment trust, fulfills community needs for quality healthcare facilities

while enabling care providers to allocate their capital to growth and investment in their contemporary clinical and critical care

Urban and suburban communities are in need of modern healthcare facilities that provide a range of medical outpatient

The funds ultimate product is an investor opportunity in a managed medical real estate investment trust.

Sentinel Brokers Company, Inc.

(“Sentinel”) began business on January 1, 1996.

It’s primarily engaged in acting

as an intermediary facilitating the trading of Municipal Bonds and Preferred Stocks between institutions.

Sentinel has no retail

customer base.

Sentinel is a broker-dealer registered with the Financial Industry Regulatory Authority (FINRA) and the Securities

Exchange Commission.

Sentinel, as a non-clearing broker, does not handle customers’ funds or securities.

In April of 2025,

Sentinel received approval from FINRA to perform underwriting licenses.

private investment bank specializing in corporate finance advising, raising equity, and venture services, providing a global “one-stop”

corporate consultancy to listed companies.

From corporate finance to professional valuation, corporate communications to event management,

BMIC services companies in the US, Hong Kong, Singapore, Taiwan, Japan, Canada, and Australia.

DSS Wealth Management:

AmericaFirst is a suite of mutual funds managed by DSS Wealth Management.

AmericaFirst expects to expand into numerous investment

platforms including additional mutual funds and exchange-traded funds.

AmericaFirst currently consists of four mutual funds that

seek to outperform their respective benchmark indices by applying top-down, fundamental research, quantitative and technical analysis

to stock selection and portfolio management.

Marketing Segment :

provides services to assist companies in the emerging growth gig business model of peer-to-peer decentralized

sharing marketplaces.

It specializes in marketing and distributing its products and services through its subsidiary and partner network,

using the popular gig economic marketing strategy as a form of direct marketing.

Direct marketing products include, among other things,

nutritional and personal care products sold throughout North America, Asia Pacific and Eastern Europe.

of operations for the three and nine months ended September 30, 2025, as compared to the three and nine months ended September 30, 2024.

In the world of securities and investment management, we aim to provide expertise and guidance to help our

clients navigate the complexities of the financial markets and achieve their investment goals.

of these business lines is at a different stage of development, growth, and income generation, reflecting the diversity of our operations.

This multi-faceted approach allows us to adapt to changing market conditions and explore new opportunities for expansion and success.

We are committed to our continued evolution and to delivering value to our stakeholders across these diverse business lines.

Business Lines and Global Presence:

the banner of DSS, Inc., we have diversified our operations into four distinct business lines, each with its own unique scope and geographical

These business lines include:

Led by Premier Packaging Corporation, Inc.

(“Premier”), a New York corporation, this segment specializes in paperboard

and fiber-based folding carton manufacturing, consumer product packaging, and document security printing.

Premier is headquartered in

its newly established facility in Rochester, NY, primarily serving the US market.

Biotechnology:

This business line is dedicated to investing in or acquiring companies in the BioHealth and BioMedical fields, focusing on drug discovery,

prevention, treatment of various diseases, and open-air defense initiatives against infectious diseases.

American Pacific Financial, Inc.

(“APF”) represents our financing business line.

Looking ahead, to better meet the

needs of the current financial market, the company is looking to transition away form certain industries like direct marketing and focus

more on growing its inventory / equipment loan portfolio as well as engaging in more specialized areas of lending like broker/dealer

We will continue to monitor our managed loan portfolio, and explore future opportunities.

Importantly, the equity portfolio as

a bank holding company is anticipated to remain relatively stable, regardless of stock market fluctuations.

and Investment Management:

This division focuses on acquiring assets in the securities trading and management arena, including broker-dealers.

It also oversees a real estate investment trust (REIT) that acquires hospitals and care centers.

of operations for the three and three months ended March 31, 2026, as compared to the three months ended March 31,

discussion should be read in conjunction with the financial statements and footnotes contained in this Quarterly Report and in our Annual

Report on Form 10-K for the year ended December 31, 2025.

Three months ended September 30, 2025

Three months ended September 30, 2024

Nine months ended September 30, 2025

Nine months ended September 30, 2024

Printed products

Rental income

Net investment income

Commission revenue

Biotechnology retail sales

Total Revenue

the nine months ended September 30 2025, total revenue increased 22% as compared to the nine months ended September 30, 2024.

in Printed Product revenue of approximately 16% is driven by new customer orders as well as existing customer orders exceeding their

The increases in Securities revenue of approximately 61% is driven by an increase in rental income by new tenants at AMRE

LifeCare Pittsburgh facility beginning to making rental payments in the second half of 2024.

The decreases in Net investment income approximating

80% is due to a number of loans made going on non-accrual as borrowers have struggled to make expect payments.

Biotechnology revenue

is driven by sales of the Company’s air purification Celios brand.

Three months ended September 30, 2025

Three months ended September 30, 2024

Nine months ended September 30, 2025

Nine months ended September 30,2024

Three months ended

Product Packaging

Commercial Lending

Biotechnology

the three months ended March 31, 2026, total revenue decreased 13% as compared to the three months ended March 31, 2025.

Printed Product

revenue increased approximately 4% is driven by new customer orders as well as existing customer orders exceeding their forecasts.

decreases in Securities revenue of approximately 83% is driven by decreases in rental income as a tenant at AMRE LifeCare Pittsburgh

facility vacated the location during the second half of 2025.

Additionally, the Company received approximately 90% less in commission

revenues associated with its Sentinel Brokers subsidiary during the three months ended March 31, 2026 as compared to March 31, 2025.The

decreases in Commercial lending income approximating 71% is due to a number of loans made going on non-accrual during 2025 as borrowers

have struggled to make expect payments.

Biotechnology revenue is driven by sales of the Company’s air purification Celios brand.

Three months ended

March 31, 2026

Three months ended

March 31, 2025

Cost of revenue

Printed products

Biotechnology

Commercial lending

Direct marketing

Sales, general and administrative compensation

Sales, general and administrative

Professional fees

3 unchanged sentences

Research and development

Other operating expenses

Total costs and expenses

operating expenses

costs and expenses

of revenue includes all direct costs of the Company’s printed products, including its packaging and printing sales and its

8 unchanged sentences

impairment of notes receivable for those amounts at risk of collection.

Total costs of revenue decreased for the nine months ended September

30, 2025 as compared to September 30, 2024 by approximately 3%.

Cost of revenue increased at our Printed products business line driven

by an increase in revenue which was offset by decrease in cost of revenue within our REIT business driven by the sale of the Plano, Tx

facility as well as new tenants at our Pittsburgh, PA facility paying related cost previously paid for by the Company as well as decreases

in our Commercial lending business unit driven by decreases on loans reserved for year over year.

general and administrative compensation costs, excluding stock-based compensation, increased 21% for nine months ended September

30, 2025 as compared to 2024 is primarily due to bonus awarded to Heng Fai Holdings Limited (“HFHL”), a Hong Kong Company,

which is beneficially owned by Mr.

Heng Fai Ambrose Chan, Director of DSS, Inc., for services rendered.

The issuance was approved by

the board of directors on January 31, 2025.

fees increased for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024 due to

cost incurred associated with the resignation of the Company’s position as the registered investment advisor for the

AmericanFirst Funds as well as recruiting costs incurred to expand the sales force at Premier Packaging.

Professional fees increased for the nine

months ended September 30, 2025 as compared to 2024 due primarily to efforts taken to control these costs as the Company continues

to drive savings in non-essential areas.

based compensation includes expense charges for all stock-based awards to employees, directors, and consultants of Impact Bio.

Total costs of revenue increased for the three months ended March

31, 2026 as compared to March 31, 2025 by approximately 7%.

Cost of revenue increased at our Printed products business line driven by

an increase in revenue year over year which was offset by decrease in cost of revenue within our REIT business driven by the sale of

the Fort Worth, Tx and Winter Haven, Fl facilities in December 2025 for which costs were incurred during the three months ended March 31, 2025 and not incurred during the three months

ended March 31, 2026.

general and administrative compensation costs, excluding stock-based compensation, decreased 15% for three months ended March 31,

2026 as compared to 2025 is primarily due to headcount reductions within our Securities segment.

fees increased for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025 due to cost incurred

to expand the sales force at Premier Packaging as well as training for Premier’s operations staff.

Additionally, cost have increased

at Impact BioMedical as a result of due diligence and other professional fees in connection with potential mergers and/or acquisitions.

Stock-based compensation includes expense charges for all stock-based awards to employees, directors, and consultants of Impact Bio.

awards can include option grants, warrant grants, and restricted and unrestricted stock awards.

These types of awards were not used prior

to the Company’s IPO in September 2024.

In January 2026, the Impact BioMedical granted and issued 3,200,000 shares of common stock, valued at approximately

$1,440,000, to various individuals including executives, board members, and audit committee members for services to be provided during

the first quarter of 2026.

On February 6, 2025, 1,000,000 shares of the Company’s common stock, valued at approximately $870,000,

was awarded as compensation to Heng Fai Holdings Limited (“HFHL”), a Hong Kong Company, which is beneficially owned by Mr.

Heng Fai Ambrose Chan, Director of DSS, Inc., for consulting services to be provided during the first quarter of 2025.

and marketing which include internet and trade publication advertising, travel and entertainment costs, sales-broker commissions,

and trade show participation expenses.

Sales and marketing decreased 21% during the nine months ended September 30, 2025 as compared

to 2024 due to decreases in marketing, and travel costs within our Printed Products division.

and utilities decreased 29% during the nine months ended September 30, 2025 as compared to 2024 primarily due to end of the

lease in office space in California for the Company’s DSS Wealth Management subsidiary.

Research and development

costs represent costs consisting primarily of independent, third-party testing of the various properties of each technology the Company

owns possesses as well as research on new technologies.

These costs increased for the three and nine months ended September 30, 2025

as compared to September 30, 2024, due cost incurred to file, perfect or update existing and potential patents on technologies owned

by Impact BioMedical.

Sales and marketing decreased 6% during the three months ended March 31, 2026 as compared to 2025

due to decreases in marketing, and travel costs within our Printed Products division.

and utilities increased 5% during the three months ended March 31, 2026 as compared to 2025 primarily driven by increases in utilities

at our Premier Packaging facility.

and development represent costs consisting primarily of independent, third-party testing of the various properties of each technology

the Company owns, research on new technologies as well as costs to patent newly developed technologies and other related fees for the

development of new technologies.

Research and development decreased 81% for the three months ended March 31, 2026, as compared to the

three months ended March 31, 2025 due primarily to a decrease in spending on identifying new technologies as well as pausing the spend

on several in-development technologies at our Impact BioMedical subsidiary.

operating expenses consist primarily of equipment maintenance and repairs, office supplies, IT support, and insurance costs.

costs decreased approximately 20% during the nine months ended September 30, 2025 as compared to September 30, 2024, primarily due to

collections of previously written-off of accounts receivable associated with our AMRE LifeCare facilities of approximately $600,000.

costs increased approximately 289% during the three months ended March 31, 2026 as compared to March 31, 2025, primarily due to collections

of previously written-off of accounts receivable associated with our AMRE LifeCare facilities of approximately $600,000.

Income (Expense)

Three months ended September 30, 2025

Three months ended September 30, 2024

Nine months ended September 30, 2025

Nine months ended September 30, 2024

Three months ended

Interest Income

Interest income on note receivable, related

Dividend Income

1 unchanged sentence

Interest Expense

Foreign Currency Translation Adjustment

Gain/(Loss) on extinguishment of debt

(Loss)/gain on equity method investment

Gain (loss) on investments

Impairment of intangible assets

Provision for loan losses

(Loss)/gain on sale

Total other income

$ (1,030,000 )

Loss on equity method investment

Loss on investments

Change in fair value of convertible bond investment – related party

Loss on sale of real estate

$ (1,637,000 )

1 unchanged sentence

in interest income is driven by several notes being put on non-accrual as the related borrowers have shown an inability to pay timely.

income for the nine months ended September 30, 2025 as compared to 2024 decreased 74% due primarily to income incurred in 2024 regarding

the Company’s distribution agreement with BioMed Technologies that did not reoccur in 2025.

expenses decreased 20% during the nine months ended September 30, 2025, as compared to the same period in 2024, due to

decreasing debt balances driven by the sale of the Company’s Plano, Texas facility.

income on notes receivable, related party is recognized on the Company’s notes receivable with related parties identified in

Note 4 and remained flat year over year as outstanding principal balances remained flat year over year.

income for the three months ended March 31, 2026 represent dividends received on certain investments owned by the Company.

dividends were received the three months ended March 31, 2025.

income (expense) for the three months ended March 31, 2026 as compared to 2025 fluctuated due primarily to foreign exchange losses

for the three months ended March 31, 2026 of approximately $19,000 as compared to approximately $3,000 for the three months ended March

expenses increased 18% during the three months ended March 31, 2026, as compared to the same period in 202, due to additional debt

taken on during the fourth quarter of 2025.

on equity method investment is the Company’s prorated portion of earnings on its investments treated under the equity method

of account for the nine months ended September 30, 2025 as compared to 2024.

(loss)on investments consists of net realized losses on marketable securities which are recognized as the difference between the

purchase price and sale price of the common stock investment, and net unrealized losses on marketable securities which are recognized

on the change in fair market value on our common stock investment.

The decrease in loss on investment for the nine months ended September

30, 2025 as compared to 2024 is driven by the performance of our stock portfolio.

of intangible assets is a result of the Company resigning its position as the registered investment advisor (“RIA”) of

the American First Mutual Funds.

The related asset was acquired at the time the Company became the RIA in September 2021.

for loan losses represents a reserve put against certain notes receivable deemed uncollectible.

During the nine months ended September

30, 2025, the Company reviewed the entire loan portfolio and determined no additional provisions for loan losses was necessary.

of account for the three months ended March 31, 2026 as compared to 2025.

on investments consists of net realized losses on marketable securities which are recognized as the difference between the purchase

price and sale price of the common stock investment, and net unrealized losses on marketable securities which are recognized on the change

in fair market value on our common stock investment.

The decrease in loss on investment for the three months ended March 31, 2026 as

compared to 2025 is driven by the performance of our stock portfolio.

Change in fair value of convertible

bond investment – related party represents the change in fair value of the convertible bond investment in True Partners from

the acquisition date of March 27, 2026 and March 31, 2026.

on sale of real estate is driven by the sale of the Company’s Plano, Texas facility.

Three months ended September 30, 2025

Three months ended September 30, 2024

Nine months ended September 30, 2025

Nine months ended September 30, 2024

$ (2,229,000 )

$ (5,701,000 )

Three months ended

$ (6,354,000 )

$ (5,296,000 )

the nine months ended September 30, 2025 the Company recorded net losses of $10,088,000 as compared to net losses of $15,762,000 for

the same period in 2024.

The decrease in net loss is driven increases in revenue at our Printed products and Securities divisions of

approximately $1,820,000 and $1,242,000 respectively.

The Company also saw a gain in our investments of approximately $2,126,000 during

this time frame.

This is offset by the bonus paid to Heng Fai Holdings Limited of approximately $871,000 during the first quarter of

2025 as well as an approximate loss of $727,000 on the sale of the Company’s Plano, Tx facility.

the three months ended March 31, 2026 the Company recorded net losses of $6,354,000 as compared to net losses of $5,296,000 for the same

period in 2025.

The increase in net loss is driven by a decrease in total revenue of approximately 13% as well as stock-based compensation

of approximately $1,440,000 paid at our Impact BioMedical subsidiary during the first quarter of 2026.

AND CAPITAL RESOURCES

Company has historically met its liquidity and capital requirements primarily through the sale of its equity securities and debt financing.

As of September 30, 2025 the Company had cash of approximately $9.5 million.

As of September 30, 2025, the Company believes that it will

have access to sources of capital from the sale of its equity securities and debt financing, and thus believes that it has sufficient

cash to meet its cash requirements for at least the next 12 months from the filing date of this Quarterly Report.

As of March 31, 2026 the Company had cash of approximately $4,936,000.

As of March 31, 2026, the Company believes that it will have

access to sources of capital from the sale of its equity securities and debt financing, and thus believes that it has sufficient cash

to meet its cash requirements for at least the next 12 months from the filing date of this Quarterly Report.

Flow from Operating Activities

cash used by operating activities was $7,576,000 for the nine months ended September 30, 2025 as compared to cash used of $5,889,000

for nine months ended September 30, 2024.

This fluctuation is driven by decreases in net loss, after reconciling items, approximating

$2,808,000, offset by increases in accounts receivable by approximately $3,227,000

cash used by operating activities was $133,000 for the three months ended March 31, 2026 as compared to cash provided by $1,168,000

for three months ended March 31, 2025.

This fluctuation is driven by increases in net loss, after reconciling items, approximating

$752,000, an increases in inventory of approximately $211,000 offset by accounts receivable decrease by approximately $229,000 and accounts payable of approximately $789,000.

Flow from Investing Activities

cash provided by investing activities was $12,080,000 for the nine months ended September 30, 2025 as compared to net cash provided by

investing activities of $9,916,000 for the nine months ended September 30, 2024.

This fluctuation is driven by the sale of real estate

approximating $9,023,000, the sale of marketable securities of approximately $3,438,000, and the sale of related party investments of approximately

$2,414,000, offset by the purchase of marketable securities of approximately $2,794,000 during 2025 versus a sale of marketable securities

of $0 during 2024.

This is offset by receipts on Notes receivable of $4,039,000 in 2024 versus $225,000 in 2025.

cash used by investing activities was $2,639,000 for the three months ended March 31, 2026 as compared to net cash provided by

investing activities of $10,070,000 for the three months ended March 31, 2025.

This fluctuation is driven by the cash outflow for

the purchase of a convertible bond – related party of approximately $2,450,000 during the first quarter of 2026.

During the first quart of 2025, there was a cash inflows for the sale of real estate

approximating $9,500,000, and the sale of related party investments

of approximately $1,500,000, offset by the purchase of marketable securities of approximately $1,000,000.

Flow from Financing Activities

cash used by financing activities was $8,816,000 for the nine months ended September 30, 2025 as compared to net cash provided by

financing activities of $989,000 for the nine months ended September 30, 2024.

This variance is driven by payments toward long term

debt of $11,492,000, payments on margin loans of $943,000 offset by borrowings of long-term debt of $3,250,00 in 2025 versus

payments toward long term debt of $1,492,000 in 2024, no payments on margin loans during 2024, offset by issuance of common stock of a subsidiary of $2,227,000.

cash provided by financing activities was $1,394,000 for the three months

ended March 31, 2026 as compared to net cash used by financing activities of $11,694,000 for the three months ended March 31, 2025.

variance is driven by payments toward long term debt of $284,000, payments on margin loans of $1,548,000 offset by borrowings of convertible

note payable – related party of $2,450,000 during the first quarter of 2025 versus payments toward long term debt of $8,997,000

and payments on margin loans of $2,806,000 during the first quarter of 2025.

Sheet Arrangements

8 unchanged sentences

There have been

no material changes to such critical accounting policies as of the Quarterly Report on Form 10-Q for the quarter ended September 30,

no material changes to such critical accounting policies as of the Quarterly Report on Form 10-Q for the quarter ended March 31, 2026.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis